The Australian Bureau of Statistics (ABS) reported a robust increase of 6.3% in dwelling approvals this January, rising to 16,579 following a moderate increase in December.
“Approvals for private dwellings excluding houses led the surge, jumping 12.7% to reach a peak not seen since December 2022,” said Daniel Rossi, head of construction statistics at ABS.
While private sector house approvals rose modestly by 1.1% to 9,042 dwellings, marking an 8.9% increase from last January, the gains were unevenly distributed across states.
Queensland, Western Australia, and South Australia experienced notable increases, whereas Victoria and New South Wales saw declines.
The rise in dwelling approvals was significantly bolstered by the approval of several large apartment projects in New South Wales, propelling a 12.7% increase in private sector dwellings excluding houses, ABS reported.
This sector’s growth is substantial, reflecting a 41.6% rise over the past year, amidst a general decline in the value of total building approvals, which fell by 6.9% to $14.73 billion in January.
Industry experts weigh in on the ABS data
The Property Council of Australia acknowledged the increase as a positive step but stressed the need for continued growth to meet housing targets.
“It’s encouraging to see the numbers rise, but we must maintain this momentum to overcome our housing crisis,” said Matthew Kandelaars (pictured left), group executive of policy and advocacy.
Neha Sharma (pictured centre), an economist at Westpac, provided a cautious interpretation of the data, noting the underlying instability despite the positive trend.
“While the rise in approvals is promising, the volatility of the December and January figures suggests that the steady momentum in the market is not yet stable,” Sharma said.
Shane Garrett (pictured right), chief economist at Master Builders Australia, which recently launched a campaign to tackle the housing crisis, stressed the importance of the uplift in high-density home building approvals, which saw a 12.8% increase.
“This momentum needs to be sustained to address the dire shortage of rental accommodations, which is pushing rental prices upward,” Garrett said.
Looking forward: Challenges and opportunities
As the industry reacts to these developments, there’s a consensus on the need for strategic action to sustain growth.
The insights from property and building experts underscored the complexity of Australia’s housing market, highlighting the critical role of policy and economic conditions in shaping the future of residential construction.
More information is available in "Building Approvals, Australia" from ABS. Also read the insights from Westpac, Master Builders, and the Property Council.
